Suppose that the United States decides to fix the dollar-euro exchange rate. If the U.S. central bank observes that the quantity supplied of euros exceeds the quantity demanded of euros at the fixed exchange rate, to maintain the exchange rate, the U.S. central bank will
A) need to reduce the domestic supply of dollars.
B) need to appreciate the dollar.
C) realize an increase in its reserves of euros.
D) realize a decrease in its reserves of euros.
Correct Answer:
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